The outbreak of the new coronavirus in China could hardly come at a worse time for Japan's tourism and retail industries.

With the Lunar New Year starting on Saturday, retailers had been counting on an influx of Chinese tourists to help offset tepid domestic consumption. Duty-free shops, drugstores and cosmetic shops have stocked up on popular goods and even brought in Chinese-speaking staff for the expected rush.

Expectations of a windfall, however, have been tempered by worries about the spread of the mysterious virus that has killed 26 people as of Thursday.